The possibility of an unfavourable precedent is not a sufficient substantial interest to join legal proceedings between other parties

The possibility of an unfavourable precedent is not a sufficient substantial interest to join legal proceedings between other parties

In its judgment dated 12 June 2015, the Dutch Supreme Court decided in the matter between TenneT and ABB that the potential precedent effect of a judgment resulting from certain legal proceedings did not constitute a sufficient substantial interest for a third-party to join in these legal proceedings. This will have an impact on future third-party applicants seeking to join in claims or cases between parties relying on the same or similar facts.

The proceedings between TenneT and ABB involved a claim for damages incurred by TenneT as a result of alleged cartel agreements between a number of parties in the GIS-sector (‘gas insulated switchgear-sector’), including ABB and Alstom.

On appeal in cassation, Alstom applied to join in the proceedings between TenneT and ABB, on the side of ABB. Alstom claimed that it was engaged in legal proceedings with TenneT on similar grounds as those relied upon by ABB in the present appeal in cassation. According to Alstom, the appeal in cassation between TenneT and ABB raised similar legal questions to those raised in the proceedings between TenneT and Alstom pending before the District Court. Therefore, the outcome of the appeal in cassation between TenneT and ABB could have implications for the legal position of Alstom in its proceedings against TenneT.

Pursuant to article 217 DCCP (Dutch Code of Civil Procedure), a claim by a third-party to join in the proceedings can only be awarded if the third party has an interest in the proceedings at hand. In case law, the Supreme Court set a fairly broad criterion to determine what is considered to be an interest: “For such an interest to be assumed, it is sufficient that the third-party who claims to join in the proceedings may experience unfavourable consequences in an unfavourable outcome of the proceedings for the party on which side the party who claims for a joinder wishes to join” (Supreme Court 28 March 2015, ECLI:NL:HR:2014:768).

The decision of the Supreme Court in the proceedings between TenneT and ABB, might indeed exert influence on the District Court and as such affect the position of Alstom in its proceedings against TenneT. According to the advocate-general though, the fear of an unfavourable precedent cannot be regarded as a sufficient interest allowing Alstom to intervene.

According to the advocate-general it would be too far-reaching to allow a third-party to join the proceedings merely because there is a possibility that the party could be affected by an unfavourable precedent. In addition to the interests of the third-party wishing to join the proceedings, the interests of the original parties in the proceedings should be taken into account. Allowing a third-party intervention will in general result in higher costs for the original parties and cause further delay in the proceedings. According to Van Peursem, such a broad interpretation of ‘interest’ to allow a third party to join the proceeding is not desirable since it would allow third parties to join against the wishes of (one of) the original parties in the proceedings.

In its decision dated 12 June 2015 the Supreme Court held that: the possible precedent effect of a judgment does not in itself constitute a sufficient interest to be allowed to join legal proceedings between other parties, even if there are similar claims or cases pending between some of the parties. Since Alstom solely relied on the ground that a judgment in these proceedings could possibly constitute an unfavourable precedent in its application to join in these proceedings, the claim was rejected by the Supreme Court.

Team

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